Tuesday, January 22, 2008

Non-Houstonian for Houstonians for Responsible Growth

There has been a lot of commenting on Houstonians for Responsible Growth recently. First of all, an editorial in the Sunday Chronicle by Randal O'Toole favored the status quo. O'Toole is a Cato Institute Senior Fellow whose basic theme is that any planning is in cities is bad bad bad! Here's a bit of what he wrote:

Houston is the freest major city in America, with no zoning and only moderate government intrusions into how property owners use their land. This freedom has made Houston the most affordable major city in America, with housing costs that are less than half of most other major urban areas. This freedom has also created an innovative and growth-friendly environment that is creating tens of thousands of new jobs each year.

Silly me. I thought it was $100 a barrel oil that was creating all those jobs.

Despite these benefits, the recent controversy over the Bissonnet/Ashby high rise has inspired local planning advocates to call for an increased amount of government planning of land in Houston.

Proposals have ranged from a "general plan" for the entire city "based on citizen vision, values and goals" to a variety of ordinances that appear to be aimed at limiting dense developments.

Though planners may have the best of intentions, such planning is likely to lead to higher living costs, more traffic congestion and dramatically reduced job growth.

We can see this by looking at other cities with zoning and planning.

In a sense, American cities have engaged in a controlled experiment with planning, with Houston and a few other cities doing very little, many other cities doing some planning and some cities doing highly restrictive planning.

Advocates of planning say that it will make cities more livable, but the results of many experiments across the country show just the opposite.

Cities with strong planning authority, such as Portland, Ore., and San Jose, Calif., almost invariably have the least affordable housing, the fastest growing traffic congestion and growing taxes and/or declining urban services. In the long run, these problems tend to suppress urban growth and job creation.

I certainly don't claim to be an expert here, but I will tell you people should not take what O'Toole is saying at face value. I don't know much about San Jose (I visited it once and found it fairly nice, if a tad bland). But I lived in Portland. He makes Portland sound like St. Louis. I can speak from my personal experience--of all the cities I've lived in, Portland was quite simply the best. Beautiful, livable, a city you could walk through easily, bike around safely, drive through easily (it had daily traffic jams--but so does Houston), with a great bus and rail system that I used frequently, with real neighborhoods that had neighborhood centers that people would walk to and shop in and hang out in. I don't want to oversell it, nor can I really lay down stats on it--but I can give you my personal take as a former resident that anyone who tries to tell you that Portland is some kind of bad place is lying to you--or else has a very perverse definition of "bad."

The national real estate firm Coldwell Banker reports that, in 2007, a Houston family could buy a four-bedroom, two-and-one-half bath, 2,200-square foot home for $170,000. The same house would cost more than twice that much in Portland and more than eight times as much in San Jose.

The median family income in Portland is $57,952 and the median family income in Houston is $42,925 (despite $100 a barrel oil). If you are going to compare costs, you have to also compare incomes. Unless you are just a propagandist.

The result is that growth once attracted to places like California and Massachusetts is now attracted to less heavily planned states like Georgia and Texas. Between 2000 and 2006, California's population grew by 7 percent — mostly foreign immigration — while Georgia and Texas populations grew by 12 to 14 percent.

Different places grow for different reasons, and I'm not qualified to say why Georgia grew so fast. But I can say that in 2000, the price of oil in 2006 dollars was $33.93/barrel and in 2006 it was $65.14/barrel (BP Statistical Review of World Energy, June 2007). I'm no expert, but I'm going to suggest that possibly, just maybe, that Houston's growth was fueled more by a doubling of the price of oil than by its zoning laws.

Prescriptive planning attempts to control how private landowners use their land. Long-term planning attempts to look decades into the future. No one can really predict the future, so such plans do far more harm than good.

And yet, Houston (with TXDoT) has always engaged in such planning, by virtue of planning freeways decades before their actual construction (and by planning, I also mean buying right of ways). I guess this doesn't count as planning in O'Toole's book.

Houston's lack of zoning and heavy regulation have led to an evolving system of private covenants and deed restrictions that respond to changes in tastes and demand for housing. The Harris County Toll Road Authority builds roads in response to transportation needs as expressed by people's willingness to pay tolls.

This is hilarious. O'Toole is acting like deed restrictions aren't zoning--and that they are somehow more flexible than zoning by the city. Try to tell that to someone who chooses to paint their house the wrong color in a deed restricted neighborhood. And please, does he think the Sam Houston Parkway was built when it became obvious that there was a need for it? It was built in anticipation of a need--indeed, to help facilitate the need (by helping make development in some remoter parts of the metro area feasible). The land for it was purchased decades ago--decades before it was actually built! It was planned.

On the other side of the issue, local bloggers have weighed in (as they will do). Bay Area Houston is a blog covering local politics from a ClearLake point of view.

Recently a new political action committee, Houstonians for Responsible Growth, was formed to lobby Houston City Council to continue it’s “favorable regulatory environment” for new development within the city including building a 23-story complex in a residential neighborhood. Given the history of the individuals associated with this organization, City Council should take their advise with a grain of salt, the size of a basketball.

Organizations like Houstonians for Responsible Growth claim to be reacting to the needs of the citizens of the community, when in fact it is advocating an extremely focused agenda benefiting only their members.

This is harsh, but it is true that the members of this group that have been publicized so far are people who directly benefit financially from Houston's relatively lax regulatory environment. Bay Area Houston goes on to talk about similar initiatives, with a message that says, in effect, that when you hear deregulators, libertarians, and privatizers telling you how much money you'll save, hold onto your wallet. To wit:

The Texas Residential Construction Commission TRCC (trick) was created in 2003 to “regulate” the homebuilding industry. It was designed and created by the homebuilders of Texas, including some of the members of Houstonians for Responsible Growth. Instead of providing consumer protection, as promised, it established extremely limited new home warranty standards, a complicated, costly, and worthless complaint process, and protects the industry from lawsuits for defective homes. As with the Houstonians for Responsible Growth, the supporters of the TRCC claimed it would promote affordable housing for the middle class.

In the end, homes are no more affordable than they were prior to the TRCC.

Few, if any, in Houston can forget the promises of deregulation of insurance, electricity, and college tuition rates. After all the promises by all the front groups of the industries of providing affordable and competitive rates, Texas has the highest rates of home insurance in the country, electricity rates have skyrocketed, and a college education is out of reach for many middle class families. And once again, many of the same individuals supporting Houstonians for Responsible Growth were involved with the same promises of affordability and competition of deregulation.

A little more on-topic was this post from the best local transit blog, the wonkish and technocratic Intermodality.

There are more than two sides to this debate. In fact, I count four. Bob Lanier is pro-growth and anti-planning. The people fighting the Ashby highrise are anti-growth and pro-planning; they want new regulations to prevent new development in their neighborhoods. But many of the people talking about planning are actually pro-growth and pro-planning; they see Houston is growing and they want that growth to happen intelligently. And if you look hard enough you’ll find people who are anti-growth and anti-planning; they probably think that the problem is illegal immigration or maybe public subsidies for sports stadiums.

(I have to say I cringe at subsidies for public sports stadiums, because it always feels like a transfer of wealth from taxpayers to a small number of really wealthy team owners.)

It’s the anti-growth/ pro-planning people who are setting the agenda right now; a backlash against unplanned growth in established neighborhoods is leading many to want to stop growth altogether. That worries the pro-growth, anti-planning developers. But it also worries the pro-growth, pro-planning crowd. The thing to watch is who allies with whom.

Houston already has building regulations. Houston’s development regulations regulate how far buildings have to be from the street, how much parking has to be provided, how much green space there needs to be around buildings, and much more. The net effect is to limit density, increase the cost of urban development, and encourage suburban-style development.

This is one of the big complaints in the New Urbanist manifesto, Suburban Nation.

And while the city doesn’t implement use-based zoning, deed restrictions in most Houston neighborhoods do. Deed restrictions are actually more draconian than government zoning since they are so hard to change.

The Houston region has some of the strictest zoning in the country. Planned communities are called that for a reason. Every large suburban development in Houston has an extensive set of restrictions that govern the shape, appearance, and use of buildings. These are as strict as anything a government agency ever dreamed of.

This point cannot be repeated often enough. I sometimes hear people try to distinguish zoning from deed restrictions by saying that deed restrictions are private, therefore somehow better. But if you want to put up a fence and someone tells you you can't, what does it matter where their authority comes from? Developers are well-aware of where they have the freedom to build what they want, and where they don't. They understandably don't want those non-deed-restricted areas to get any kind of zoning, since they are already restricted from doing much in deed-restricted areas.

Planning doesn’t imply zoning. Government agencies spend a lot of money on building things: roads, sewers, drainage, water lines, parks, transit, fire stations, libraries. These things are the infrastructure of growth, so where and how they are built helps determine where growth will happen. HarrisCounty, the City of Houston, and the Texas Department of Transportation are routinely predicting and encouraging development by building new roads and new highways. They’re also trying to keep up with growth. But the agencies that build these things often don’t talk to each other. Simply coordinating the efforts of multiple agencies to avoid costly duplication and to cost-effectively support growth could go a long way.

[...]

There is an intriguing possibility here. Conventional zoning is clearly imperfect, and so is Houston’s current regulatory system. Could we come up with something that’s better than either? Or will we simply re-fight old fights based on incorrect assumptions?

As usual, Intermodality has given me a lot to think about. I recommend anyone interested in this issue to click through and read the whole post.

1 Comments:

Excellent analysis of our market on many levels. I'm so glad to hear someone else hop in and talk about how zoning and lack there of has helped our market in so many ways. You touched on all of the topics that make the Real Estate World in Houston turn and I'm so glad I ran across this blog. Thanks!